Everton are expected to complete the £11.25m transfer of Yakubu Ayegbeni tomorrow but David Moyes is unlikely to be in the mood for wild celebration, having been gazumped at the 11th hour in his exhaustive pursuit of Manuel Fernandes.

Manager and officials of the Goodison Park club were livid with the Portugal Under-21 international midfielder last night after he signed a six-year contract with Valencia less than 48 hours after agreeing to become Everton's record signing with a £12m move from Benfica. That mantle will now go to Yakubu, who is scheduled to complete his transfer from the Riverside Stadium after an appeal over a rejected work-permit application is heard tomorrow.

Fernandes had been training with Everton for the past week and appeared certain to end Moyes's summer-long search for a creative central midfielder. Personal terms had been agreed on a five-year contract at Goodison, a two-part medical completed, third-party ownership issues had been resolved and the player had shaken hands on the transfer with Bill Kenwright in the wake of a meeting between the Everton chairman and Fernandes's representatives after Saturday evening's 1-1 draw at home to Blackburn Rovers.

Everton had expected to announce Fernandes as their second record transfer of the week, having agreed a £12m deal with the Portuguese club that would also have acquired the 50% stake held in the player by the Global Sports Agency. However, the 21-year-old suddenly returned to Lisbon on Sunday morning and was unveiled at the Mestalla Stadium yesterday. Valencia reportedly agreed a £12.2m fee and offered the player a more lucrative contract than he had accepted at Goodison and more cash up front to Benfica.

Fernandes gave no explanation for his about-turn at his Valencia unveiling last night and Everton have been unable to obtain one from his representatives after a move that has left Moyes only four days to reinforce his midfield. Although the collapse of the deal leaves the Everton manager with the money to spend, he is reluctant to pay the excessive prices that are now being demanded as the transfer deadline approaches .

"I thank Valencia for their confidence and hope to be in my new team for many years," the Portuguese midfielder said last night. "I have spoken before with Miguel [Valencia's Portuguese full-back] and he has told me that it is a great club, with the possibility to grow."

Yakubu was denied a work permit on Friday having failed to appear in over 75% of Nigeria's international fixtures over the past two years after a dispute with the management team, but his appeal is expected to succeed on the basis that the striker, who played for Portsmouth before moving to Middlesbrough, has enjoyed a successful career in English football for the past five years.